Question On Completing Self Assessment

Andrea2528

Hi,

I've got a question on completing self assessment. When calculating annual turnover, can someone tell me if you exclude the VAT amount from the figure earned. My partner is a self-employed Agricultural contractor.

Also, what does the question 'Do you want to claim averaging refer to'? I'm thinking it might apply to my partner since he is a contract farmer.

Thanks

susie81

Firstly, I should say that I work in tax and accountancy but obviously have to have a disclaimer for anything I do say below to cover myself! You should check with your own accountant/tax adviser.

Provided you are VAT registered, you don't include the VAT in your turnover. It should be the net turnover figure.

Secondly, there is a relief for farmers called farmers averaging relief which is what the question refers to. However, you have to make sure you come under the definition of a farmer (which I'm not too certain about) but have recently completed a return for a stud farmer who didn't. It is basically your traditional view of a farmer, although market gardeners are also eligible for the relief. The best thing to do if you're not sure is contact your tax office and explain exactly what he does and whether he would come under the definition.

The relief available is then quite complicated to explain. If you are eligible you need to look at your taxable profit for this year and last year. If one is 75% less than the other then you are eligible for either full or marginal averaging relief. I can't really explain it here but it is one where you would probably need an accountancy firm to help you out. You'd have to amend your prior year return as well as preparing this years.

If the profits are within 75% of each other, you can't claim the relief anyway and you should answer no.

Hope this helps a bit.